New extensions and anti-crisis measures approved by the government
On 25 June, the new Royal Decree-Law 11/2022 came into force. The three reasons for this urgent approval are as follows:
1.The war conflict provoked by the invasion of Ukraine, through the main cause of natural gas, fuels and food.
2.The social protection measures taken to address situations of social and economic vulnerability.
3.The expiry of the aid implemented in response to the volcanic eruption that started on 19 September 2021 La Palma.
The aim to ensure the perpetuation of the negative economic consequences caused by the causes mentioned above. These include:
– The increase of 15% of the minimum living income.
– The discount of 20 cents per litre on fuels.
– The 2% cap on the renewal of rents.
– VAT reduced to 4% on surgical masks.
– A ban on cuts in basic supplies for vulnerable families.
– A ban on dismissals for companies that are receiving any aid or subsidy from public funds.
– Deferral of Social Security payments for the fishing, agricultural and transport sectors.
– Direct aid to the intensive gas industry.
– Drought aid.
– Measures for those affected by the La Palma volcano.
In addition to these aids, the following will be alleviated in the coming months:
1 JULY
Wage earners, self-employed and unemployed persons registered at the employment offices will be able to receive a one-off payment of 200 €.
To receive this assistance, beneficiaries must live in households in which the sum of the income received by the cohabitants is less than €14,000 in 2021 and whose assets, excluding the main residence, do not exceed €43,196.4.
Reduction of VAT on electricity
The main fiscal novelty is the reduction of VAT on electricity from 10% to 5% until 31 December 2022. This means that Spain will have the lowest VAT on electricity in the EU. The new lowering of VAT on electricity takes place under the same terms in which it was in force. In other words, it affects consumers with a contracted power of 10 kW or less.
Freezing of the price of a butane cylinder at 19.55 Euros
The price of 19.55 euros, set at the last review on 12 May, will be maintained until the end of the year.
Increase in non-contributory pensions
Non-contributory retirement and disability pensions are increased by 15%. 60 per month, €370 until the end of the year.
1 SEPTEMBER 2022
Reduction of the transport pass
The Government will also finance a 30% reduction in the price of all season tickets and multi-journey tickets for land public transport services under regional or local jurisdiction, sold between 1 September and 31 December 2022.
In the case of annual transport season tickets purchased before 27 June, the competent administration may decide to set up a system to allow the user to be refunded the proportional part corresponding to 30% of the four-month period.
1 JANUARY 2023
The new tax on the profits of large energy companies
According to sources at the Ministry of Finance, the idea is to put the accrual date of the new tax at 31 December 2022, so that the new tax would be payable from 1 January 2023; however, it would affect the extraordinary profits made by these companies this year.
Here you can find more detailed information about the economic spin-off in Ukraine and the volcanic eruption on La Palma.